Abstract:

The search for the real causes behind the Asian financial crisis is turning up a lengthy list of suspects. In trying to comprehend the magnitude and contagion effects of the crisis, investors and policy makers from crisis ridden countries have blamed the financial distress from
speculative attack to the failure of free market capitalism. The purpose of this paper is to examine whether the free market capitalism or some other imminent factors should be blamed for the financial distress in Asia. Does the financial distress in the crisis advocate for tighter financial
discipline among market participants or increase institutional and government control on both the creditors and borrowers?